Pandemic Can’t Stifle Startups

ADF STAFF

The global COVID-19 pandemic is triggering entrepreneurial creativity around the world.

In Africa, entrepreneurs are finding success — and capital — in creating startup businesses that address challenges for people living in the new normal.

The e-commerce industry alone experienced a triple-digit increase in business after the virus outbreak, according to the United Nations Conference on Trade and Development (UNCTAD).

“The COVID-19 pandemic has accelerated the shift towards a more digital world,” UNCTAD Secretary-General Mukhisa Kituyi said on his organization’s website in October 2020. “The changes we make now will have lasting effects as the world economy begins to recover.”

In Africa, those changes have accelerated for startups despite a significant contraction in economic activity in 2020.

Venture capital for startups on the continent increased from $1.27 billion in 2019 to $1.31 billion in 2020, according to Briter Bridges, a London-based think tank focused on Africa.

The think tank also reported that African financial technology companies accounted for 31% of total investment last year.

Although digital financial services flourished specifically because of the pandemic, education companies also benefited from the sudden societal shift. About 825 million African students are affected by COVID-19 school closures, according to UNICEF’s January 12 statistics.

Nigeria-based uLesson is one of dozens of successful edtech startups on the continent. It launched weeks before COVID-19 was declared a pandemic, took a $3.1 million seed investment, and scaled its content and delivery products to expand further into West Africa.

The company, which offers K-12 curriculum for smartphones and basic phones that don’t have internet access, announced in January 2021 that it has raised another $7.5 million with plans to expand to East and Southern Africa.

“Education is one of the areas that was worst hit,” uLesson Vice President of Sales and Marketing Tayo Sowole told ADF. “While we are gradually recovering from the attendant losses, educators, parents, learners and governments are turning more and more towards technology and startups to avoid a repeat.”

When it comes to health technology, Africa has been a leader.

More than 120 innovations have been created or further developed to address the virus, according to a World Health Organization (WHO) analysis. That’s 12.8% of the 1,000 anti-pandemic technologies worldwide analyzed by the WHO.

More than half involved information and communications technology (ICT), a quarter were based on 3D printing and 10.9% were robotics. The ICT-driven innovations include self-diagnostic tools in Angola, contact tracing apps in Ghana, mobile health information tools in Nigeria and WhatsApp Chatbots in South Africa.

“COVID-19 is one of the most serious health challenges in a generation, but it is also an opportunity to drive forward innovation, ingenuity and entrepreneurship in lifesaving health technologies,” WHO Regional Director for Africa Matshidiso Moeti said in a virtual press conference in October 2020.

“It’s great to see the youthful energy of the continent fired up to fight COVID-19. Solar-powered automatic hand-washing tools, mobile applications that build on Africa’s rapidly growing connectivity. These homegrown innovations are uniquely adapted to the African context.”

Whether it’s technology dealing with finances, education, medicine or agriculture, venture capital investors continue to find and fund African startups solving African problems.

“There has never been a better time than now to bet on Africa,” Sowole said. “One of the things the pandemic has done is speed up the rate of technology adoption. People quickly realized that the status quo was not sustainable in the face of our new realities.

“The fact that we are not quite out of the woods yet is getting people to be futuristic in their thoughts and actions.”